Has my late mother been ripped off by 2% charges

22225

Hello everyone, 
My mother died this year. She was a teacher and when she retired he went to a seminar run by a company who advised teachers on where to invest their lump sums etc. We are dealing with probate etc and going over everything. It appears the company were charging 2% on investments such as investment ISAs etc. These charges have really cut into his investments. I feel a bit annoyed. I know it sounds greedy but I also feel annoyed on behalf of my mum. I dont think she could have understood the full impact of these charges on her investments. Do we have any address?! I know she was of sound mind etc but it feels like she's been taken advantage of a bit. She wasnt the generation where they knew about investments and would have deferred to a suave salesman. I just think 2% is taking the proverbial. Is 2% normal? The money was in actively managed funds. Please tell me what you think.

22225

Sorry for mixing the pronouns I was trying to be discreet about her identity. If that seems odd to anyone 

Thrugelmir

You've no grounds to seek compensation if that's your objective. 

El_Torro

2% charges is expensive, though being expensive is not a crime unfortunately. There are Financial Advisors out there who currently charge this much, or more. Not much you can do about it other than move the investments elsewhere. 

Does this 2% include platform charges, fund charges and ongoing advice? Since the funds are actively managed I would expect them to be more expensive than investing yourself in tracker funds.

dunstonh

It appears BBT were charging 2% on investments such as investment ISAs etc. These charges have really cut into his investments. I feel a bit annoyed.

They are high but not indecent.   Plenty of wealth managers have that sort of charge as the bottom line.   

I dont think she could have understood the full impact of these charges on her investments. Do we have any address?

Assuming you mean redress, then none whatsoever.  

. I just think 2% is taking the proverbial. Is 2% normal?

For the more expensive distribution channels then yes.   For the cheaper ones no.

22225

Yes 2% is the total price. I was surprised about it but I suppose I am more familiar with cheaper DIY tracker things. Oh well. It is a lesson for me to be aware of high charges etc going forward. The investments will be moved. Thank you for taking time to reply.

MalMonroe

22225 said:

Sorry for mixing the pronouns I was trying to be discreet about her identity. If that seems odd to anyone 

Also it's redress, not address.

Very sorry for your loss.

I don't think it's a generational thing though, to be naive when it comes to investments. I think I'm probably of your mum's generation and there are plenty of us who are savvy. It's a pity that your mum didn't discuss this matter with you but it appears that there's nothing that can be done now. 

Ibrahim5

My mother died this year. She was a teacher and when she retired he went to a seminar run by a company who advised teachers on where to invest their lump sums etc. We are dealing with probate etc and going over everything. It appears BBT were charging 2% on investments such as investment ISAs etc. These charges have really cut into his investments. I feel a bit annoyed. I know it sounds greedy but I also feel annoyed on behalf of my mum. I dont think she could have understood the full impact of these charges on her investments. Do we have any address?! I know she was of sound mind etc but it feels like she's been taken advantage of a bit. She wasnt the generation where they knew about investments and would have deferred to a suave salesman. I just think 2% is taking the proverbial. Is 2% normal? The money was in actively managed funds. Please tell me what you think.

You normally find these people are specialists in advising teachers one day, specialists in advising nurses the next day, specialists in advising dentists the day after etc
I think a few years ago it was quite difficult to get the information to do investments yourself. Now there's no excuse for paying silly fees. The only consolation is that if she hadn't have used the company she may have put it in a savings account paying 0.001% interest.

jimjames

22225 said:

Yes 2% is the total price. I was surprised about it but I suppose I am more familiar with cheaper DIY tracker things. Oh well. It is a lesson for me to be aware of high charges etc going forward. The investments will be moved. Thank you for taking time to reply.

If it's the total then that makes it far more reasonable. You could be paying at least 1% or so for the fund plus platform charges even if you did DIY. You're absolutely right that tracker funds are much cheaper than that which is why many people recommend them but active funds plus an agent managing them could reach 2%.

tebbins

If they were managing her lump sum, presumably she chose their service and their charge was 2%. Whereas if a bank had started charging money to an account in her name, and she had never agreed to their charges (just as an example) you would have more recourse.
Unfortunately there are a great many salesfolks in the investing business who target groups of retiring public sector workers at a time because too many people don't know what to do with their lump sums and think the company are somehow affiliated with the official pension scheme. You are more than welcome to complain to them directly, and to the Financal Ombudsman, your MP, the Teachers' Pension Scheme/the school she worked ar or Local Authority for allowing private interests to garner sales on public premises, but I doubt in your circumstances you have any legally enforceable right of redress.

22225

Thank you all. Regarding it being better  than being in a bank, this might not be true because she would have to pay the charges even when the funds made a lost. I think she must have being paying hundreds of pounds a month. After 12 or so years I think the amount left is basically what she put in. Anyway, I take all your points, buyer beware etc. At the time she did it I didnt know anything about investments at all and I suppose I trusted the company because of their link with the union. Thank you everyone for your replies and have a nice day.